The conventional wisdom is that the wireless industry has sort of stagnated. Differences in wireless coverage, data capabilities, and pricing have narrowed. Most smartphones are good, if not great, and even the latest flagship phones show more ‘small i’ than ‘big I’ innovation. It’s been awhile since there was a real blockbuster app. And IoT, while growing modestly, is still waiting for its breakout.
But fasten your seatbelts, because the 2019-2020 are going to be the most pivotal years in telecom in some time, setting the stage for the next phase of connectivity. Of course, 5G will be the headline story. Although we’ll see a handful of deployments before the end of this year, 2019 is when 5G gets going in earnest. That’s when 5G New Radio (NR) becomes commercially available, and true, standards-based 5G services are launched by all major U.S. operators. Additionally, during the first half of 2019, we’ll see the introduction of several 5G smartphones, although it will likely be 2020 before Apple announces a 5G iPhone.
By a year from now, all major U.S. operators will have rolled out 5G to a healthy number of major cities – each of them with a slightly different approach/strategy. There will also be 5G launches in several other countries – notably South Korea, Japan, China, and a handful in Europe. So we should have a pretty good idea of what this first wave of 5G looks like, and whether there are any breakout business cases.
In the U.S., I’m expecting two flavors of initial 5G services: hot spots in cities that will deliver more of a wow factor on speed; and ‘coverage’ oriented 5G, such as what T-Mobile is planning with its 600 MHz-based launch, which will cover a broader geography but will look more like 4G Plus or 5G Minus. Also by this time next year, Verizon will have launch its fixed wireless access service in a multitude of cities, some of them on standards-based equipment, and we’ll have a much better sense of how well 5G mmWave works as an option for fixed wireless access and whether Verizon’s service is taking any meaningful share from the incumbent broadband providers.
And finally with respect to 5G, mmWave spectrum auctions are starting in November and will continue in waves through much of 2019. We’ll see if it’s just the rich getting richer or whether there are any potentially viable new entrants. There are also a large number of 5G spectrum auctions scheduled to occur in Asia and Europe. These will be pivotal in their own right, but will also influence the development of a ‘global’ 5G band and will put pressure on the U.S. to move on mid-band spectrum.
There will also be several developments next year that will set the tone for years to come. The 3GPP is expected to approve Release 16 in the 3Q-4Q timeframe. There are many key aspects here, among the most notable being Ultra-Reliable Low Latency Communications (URLLC, say that five times quickly). This will be among the anchors for exciting new applications leveraging 5G, such as AR/VR, plus the other ‘pillars’ of 5G beyond Enhanced Mobile Broadband, such as industrial IoT and autonomous vehicles.
The launch of CBRS will also be an exciting development. In addition to introducing an innovative spectrum sharing infrastructure that could be a model for other countries and future spectrum auctions, we could also see a new model for indoor coverage and services. The PAL auctions for CBRS will occur later next year or in early 2020. This is also an area where there could be new market entrants, such as cable companies, wireless internet service providers (WISPs), and perhaps some of the more influential Silicon Valley types.
During 2019, we will also see further definition of the industry’s future structure, starting with the likely approval the T-Mobile/Sprint deal will be approved. This could trigger some other M&A activity, more broadly focused on the future of broadband than just relegated to the wireless sector. DISH will also figure in here. Even as it builds its NB-IoT network, we will know over the next 12-18 months whether its spectrum assets are acquired by another operator or whether it plans to build a wholesale 5G network, for which an anchor tenant (Amazon?) is needed.
If you’re not already out of breath, our eyes are also on the following:
- The launch of T-Mobile’s Mobile TV service based on the Layer3 acquisition. The OTT TV space is pretty crowded already, so T-Mobile will have to do something characteristically disruptive to make a mark.
- AT&T’s project AirGig. There have been some interesting trials. We’ll know more within a year or so as to the potential commercial viability of this technology.
- Small cell siting. A Battle Royale is shaping up between the feds and the municipalities regarding new rules on small cell siting (pricing and shot clock). The results here will have important implications on further 4G densification and how quickly high-band 5G is rolled out. The “U.S. Competitiveness” card could be a factor here, as other countries such as China and South Korea are able to get small cells deployed at a much more rapid clip due to a different model of ‘government involvement’.
Most importantly, within 12-18 months we’ll have a much better sense of what 5G really is and can do. This will set the stage for the development of other use cases beyond enhanced mobile broadband. The fixed wireless access piece is important as well. If 5G wireless can be a viable option for broadband, there could be a shakeup of cable’s near monopoly in that market. Who knows – maybe by 2025, a fair number of households will only have to pay for one broadband connectivity solution.
